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On 31 October 2023, the Screening of Third Country Transactions Act 2023 (the “Act”), which establishes a new foreign direct investment ("FDI") screening regime in Ireland, was enacted.
Canada | Publication | November 8, 2024
In two companion decisions, the Federal Court of Appeal has provided a sweeping review of the remedies for patent infringement in Canada and clarified the law concerning equitable relief (e.g., an infringer’s profits and injunctive relief).
One of the Court’s key findings is that a patentee is presumptively entitled to permanent injunctive relief for infringement under Canadian law if successful on the merits after a trial – even in cases where the patentee licenses its invention, rather than selling it in the form of a product or service. The Court of Appeal was unpersuaded by the trial judge’s concerns about “patent holdup” and rejected the American test for injunctive relief in patent cases, which includes a “balancing” element and consideration of “irreparable harm” – factors that are not relevant in Canada after a finding of liability (as opposed to the test for interlocutory injunctions).1
Meanwhile, in the United States, proposed legislation would amend U.S. patent law to state that the patent owner “shall be entitled to a rebuttable presumption” that courts will issue a permanent injunction following an infringement ruling – potentially shifting U.S. law closer to the Canadian approach.
In 2017–2018, Rovi Guides, Inc. (Rovi) alleged infringement of six patents relating to interactive television program guide (IPG) and Internet protocol television (IPTV) technologies.2 In a pair of 2022 decisions, the Federal Court held that all of the asserted claims were invalid and several of them were not infringed.3
Although Rovi was not entitled to any relief as a result of the Federal Court’s invalidity and non-infringement findings, the trial judge accounted for the possibility that these findings might be overturned: it conducted a detailed analysis of the remedies it would have been prepared to award if it had found for Rovi on infringement.
Rovi’s appeals with respect to the validity of the asserted claims were unsuccessful. However, the Court of Appeal disagreed with aspects of the trial judge’s remedies analysis. Though the remedies findings were not necessary to the outcome of either case – obiter dicta, in legal terms – the Court of Appeal still chose to correct the Federal Court’s errors and clarify the law.
These are the key points from the Court of Appeal’s summary of the law concerning patent infringement remedies and its findings on the facts of these cases.4
The plaintiff may claim compensatory damages under section 55 of the Patent Act. These may be quantified in a number of ways, including based on:
A defendant may argue that it should not be liable for damages, or that it should not be required to disgorge (some or all) of its profits, on the basis that it could have adopted a non-infringing alternative (NIA). For example, it may be possible to argue that damages should be limited to the amount it would have cost to design around the patented feature. However, the defendant must have been able and willing to use the NIA. It is an error to base a damages analysis on the existence of an NIA without first finding (i) what the NIA was, (ii) that it would have been a “true substitute,” and (iii) whether it would have been accepted by consumers.
Instead of compensatory damages, the plaintiff may elect to claim an accounting of profits from the defendant. The Court of Appeal recognised that this is the “dominant monetary remedy for patent infringement in Canada,” and explained when it ought to be available.
Courts also have the power to grant an injunction in cases of patent infringement in Canada, typically together with a final accounting of profits where the patent is still in force.
“A plaintiff can generally expect to receive injunctive relief in Canada,” explaining that it is “generally accepted in this country” as “the principal preventive remedy in patent law” and should be denied “only in very rare circumstances” – even in cases where the patent is close to expiry. Examples of reasons to deny an injunction include delay, unclean hands, hardship, and impossibility of performance.
In this case, the Court of Appeal rejected the existence of a separate requirement for irreparable harm or an explicit requirement for a balancing test in respect of a permanent injunction. In doing so, the Court of Appeal found that Canadian Courts “have not endorsed the American approach to permanent injunctions or any related principles derived from” the U.S. Supreme Court in eBay.
The Court of Appeal noted that under eBay, whether a patentee practices its invention – or is merely seeking licensing income – could be relevant to whether it meets the “irreparable harm” prong of the test for an injunction. The Court of Appeal declined to adopt a similar principle in Canadian law, holding that, “the fact that a patentee licences its invention does not, in and of itself, disentitle a patentee to injunctive relief.”
In the United States, proposed legislation known as the “Realizing Engineering, Science and Technology Opportunities by Restoring Exclusive Patent Rights Act” (RESTORE Act) was recently introduced in both houses of Congress (see here). This bill would amend U.S. patent law to state that the patent owner “shall be entitled to a rebuttable presumption” that courts will issue a permanent injunction following an infringement ruling. If enacted, this change would alter the current standard set by the U.S. Supreme Court in eBay, which requires courts to apply a four-factor test to determine if an injunction should be issued in a patent case (see here).
The RESTORE Act aims to make injunctions more readily available to patent owners, potentially shifting U.S. law closer to the Canadian approach. However, the bill faces an uncertain path to passage, having been introduced late in an election year. That is, similar language has been part of broader patent bills in recent years that have not advanced in Congress. While the proposed legislation has attracted attention in patent circles, its ultimate impact would depend significantly on how courts interpret and apply the new presumption in practice, including how the presumption could be rebutted.
See eBay Inc. v Merc-Exchange, LLC, 547 US 388 (2006) (eBay).
The plaintiff in T-921-17 was Rovi, which asserted Canadian Patents No. 2,336,870 (the 870 Patent), 2,339,629 (the 629 Patent), 2,337,061, and 2,730,344. The plaintiffs in T-113-18 and T-206-18 were Rovi and TiVo Solutions Inc., which asserted the 870 and 629 Patents, as well as Canadian Patents No. 2,425,482 and 2,514,585; infringement allegations in respect of two further patents in these actions were discontinued before trial.
Rovi Guides, Inc. v Videotron Ltd., 2022 FC 874, aff’d 2024 FCA 125 [Videotron FCA]; Rovi Guides, Inc. v Bell Canada, 2022 FC 1388, aff’d 2024 FCA 126 [Bell FCA].
The decisions in Videotron FCA and Bell FCA were released as “companion” cases, but are not identical. They rely on a common analytical framework but some issues are unique to one or the other of them. For ease of reading, we have summarised key take-aways of these two decisions together, without distinction. All direct quotations are from the Court of Appeal’s decisions. Our summary is not comprehensive, is not intended to be treated as a formal legal analysis, and does not constitute legal advice. We encourage readers interested in the Court of Appeal’s detailed findings to review to both decisions in full.
Publication
On 31 October 2023, the Screening of Third Country Transactions Act 2023 (the “Act”), which establishes a new foreign direct investment ("FDI") screening regime in Ireland, was enacted.
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